The Nigeria naira has plunged to an unprecedented low, reaching N1348.63 against the US dollar in the Nigerian Autonomous Foreign Exchange Market.
This record fall, reported on Monday, represents a significant 51.21% drop from the closing rate of N891.90/$ last Friday in the official market, as per data from the FMDQ Securities Exchange.
This rate marks the worst official exchange the country has seen since the Central Bank of Nigeria (CBN) floated the national currency in June 2023.
The naira’s decline has been consistent, crossing the N1000/$ mark on the official window for the first time on December 8, 2023, and subsequently falling to new lows in the following weeks and months.
Despite efforts by the CBN and the Federal Government to bolster liquidity in the foreign exchange market, the naira continues to depreciate.
On the parallel market, the situation is no better, with Bureau de Change Operators citing a closing rate of N1,450/$ on Monday, a steep rise from N1,420/$ on Friday.
Both traders, Abdusallam Abubakar and Magaji Mohammed, confirmed the rate of N1450/$ for dollar sales.
In the cryptocurrency peer-to-peer market, the naira traded for N1,429/$ on Binance’s P2P platform.
Nigeria, according to Chainalysis, a blockchain firm, stands among the countries with the highest peer-to-peer exchange volumes globally.
This depreciation comes despite the CBN’s recent actions to clear forex backlogs, including payments of $500 million and $2 billion.
The bank is rumored to owe $7 billion in FX backlogs. CBN spokesperson Mrs. Hakama Sidi Ali, in Abuja, reaffirmed the bank’s commitment to settling these backlogs and improving cash flow in the FX markets.
CBN Governor Olayemi Cardoso highlighted that the naira is currently undervalued and outlined the CBN’s strategies to salvage the situation.
However, the continuous fall of the naira is likely to have adverse effects on the prices of goods and services.